A spectral analysis of the cross-country consumption correlation puzzle
Dynamic general equilibrium models predict high cross-country consumption correlations, whereas the data show that output correlations tend to be higher. Spectral decomposition reveals that this ranking varies across frequency bands, with consumption correlations often exceeding output correlations at higher frequencies.
|Date of creation:||2004|
|Date of revision:|
|Publication status:||Published in Economics Letters, September 2004, 84(3), pp. 341-347|
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